Deputy Commissioner of Income Tax, Circle-4(1)(1), Bangalore V. M/s Kirloskar Electric Company Limited , Bangalore

MA 381/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7213 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 143(3); 14A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, BANGALORE BEFORE SHRI. JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER [MP NO. 381/B/2018 (IN ITA NO. 1 4 52 /B/201 7 )] (ASSESSMENT YEAR: 20 1 0 - 1 1 ) THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1), BANGALORE. VS. APPLICANT M/S. KIRLOSKER ELECTRIC COMPANY LTD., PB NO.5555, MALLESWARAM WEST, BANGALORE 560 055. PAN : A AB C K 2721 Q RESPONDENT REVENUE BY : SHRI. P. SIDDAPPAJJI, ADDL. CIT APPLICANT BY : SHRI. SACHIN MEHTA, CA O R D E R PER JASON P. BOAZ, AM : THIS MISCELLANEOUS APPLICATION (MP) BY REVENUE IS RAISED IN RESPECT OF THE TRIBUNALS ORDER IN ITA NO.1452/BANG/2017 FOR ASSESSMENT YEAR 2010-11 DATED 03.03.2018. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER: DATE OF HEARING : 11 / 01 /201 9 DATE OF PRONOUNCEMENT : 14 / 01 /201 9 [MP NO. 381/B/2018 (IN ITA NO.1452/B/2017)] PAGE 2 OF 4 2.1 REVENUES APPEAL IN THIS CASE FOR ASSESSMENT YEAR 2010-11 WAS DISMISSED AS NOT MAINTAINABLE AS THE TAX EFFECT OF THE ISSUES AGITATED BY REVENUE IN THIS APPEAL WAS LESS THAN THE MONETARY LIMIT OF RS.20 LAKHS AS FIXED BY CBDTS CIRCULAR NO.3/2018 DATED 11.07.2018. 3.1 IN THIS MP, REVENUE HAS CONTENDED AS UNDER: (I) THE HONORABLE ITAT, 'C' BENCH, BENGALURU VIDE ITS ORDER IN ITA NO 1452/BANG/2017/ AABCK2721Q/2010-11 DATED 03.08.2018 FOR THE ASSESSMENT YEAR 2010-11 HAS DISMISSED THE REVENUE APPEAL AS NOT MAINTAINABLE. (II) THE HON'BLE ITAT, BENGALURU, HELD THAT THE TAX EFFECT IN THE ABOVE CASE IS LESS THAN RS. 20 LAKHS. HENCE, DISMISSED THE REVENUE APPEAL IN VIEW OF THE CBDT CIRCULAR NO. 3/2018, DATED 11.07.2018. (III) IN THIS REGARD, IT IS SUBMITTED THAT THE TAX EFFECT IN THIS CASE IS RS.2,96,99,992/-. (IV) IN VIEW OF THE ABOVE, IT IS REQUESTED THAT TO RECTIFY THE IMPUGNED ORDER DATED 03.08.2018. 3.2.1 WE HAVE HEARD BOTH PARTIES IN THE MATTER AND PERUSED AND CAREFULLY CONSIDERED THE SUBMISSIONS OF REVENUE IN THE MP (SUPRA), THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL FOR ASSESSMENT YEAR 2010-11, THE ORDERS OF AUTHORITIES BELOW AND THE OTHER MATERIAL ON RECORD. IN THIS REGARD, IT IS RELEVANT THAT THE GROUNDS RAISED BY REVENUE IN THE APPEAL IN ITA NO.1452/BANG/2017 FOR ASSESSMENT YEAR 2010-11 ARE EXTRACTED HEREUNDER: 1. THE ORDER OF THE LD. CIT (A), IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, IS OPPOSED TO LAW AND THE FACT AND CIRCUMSTANCES OF THE CASE. 2. ON FACTS OF THE CASE, WHETHER THE DECISION OF THE LD CIT (A) IS CORRECT AS THE SAME CONTRAVENES THE PROVISIONS OF SECTION 14A AND ALSO THE LD CIT(A) HAS NOT FOLLOWED THE INSTRUCTIONS LAID DOWN IN THE BOARD'S CIRCULAR NO 5/2014 DATED 11.02.2014 & 14 OF 2001. [MP NO. 381/B/2018 (IN ITA NO.1452/B/2017)] PAGE 3 OF 4 3. IN VIEW OF BOARD'S CIRCULAR NO 21/2015 DATED 10.12.2015 ON MONETARY LIMIT FOR FILING APPEAL, PARA 8(B) OF THE CIRCULAR SQUARELY APPLIES TO THE FACTS OF THE CASE. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT (A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND / OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED. 3.2.2 FROM A PERUSAL OF THE GROUNDS RAISED BY THE ASSESSEE ITS APPEAL FOR ASSESSMENT YEAR 2010-11, IT IS EVIDENT THAT THE GROUNDS AT SL. NOS. 1, 4 AND 5 ARE GENERAL IN NATURE. THE ONLY SUBSTANTIVE ROUND RAISED ON MERITS BY REVENUE IS IN RESPECT OF DISALLOWANCE U/S 14A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). A PERUSAL OF THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2010-11, PASSED U/S 148 R.W.S. 143(3) OF THE ACT VIDE ORDER DATED 30.03.2016, WOULD SHOW THAT THE SAID DISALLOWANCE U/S 14A OF THE ACT WAS RS.12,83,690/- AND IT IS THE SUSTAINING OF THIS DISALLOWANCE ONLY TO THE EXTENT OF RS.86,185/- BY THE CIT(A) THAT WAS THE SUBJECT MATTER OF APPEAL BEFORE THE TRIBUNAL. IT WAS IN THESE CIRCUMSTANCES THAT THIS APPEAL OF REVENUE FOR ASSESSMENT YEAR 2010-11 WAS DISMISSED FOR LOW TAX EFFECT I.E., THE ISSUE IN DISPUTE HAD TAX EFFECT OF BELOW RS.20 LAKHS IN ACCORDANCE WITH THE MANDATE OF CBDTS CIRCULAR NO.3/2018 DATED 11.07.2018; WHICH IS ISSUED IN SUPERSESSION OF CBDTS CIRCULAR NO.21/2015 DATED 10.12.2015. 3.2.3 BEFORE US, THE LEARNED DR FOR REVENUE WAS NOT ABLE TO ESTABLISH HOW THE TAX EFFECT OF THE GROUNDS RAISED IN REVENUES APPEAL (SUPRA) WAS RS.2,96,99,992/-, AS CONTENDED AT POINT (III) IN THE MP (SUPRA), SINCE THE ONLY ISSUE AGITATED ON MERITS BEFORE THE TRIBUNAL WAS THE DISALLOWANCE U/S 14A OF THE ACT; WHICH WAS TO THE EXTENT OF RS.11,97,505/- (I.E., DISALLOWANCE BY AO OF [MP NO. 381/B/2018 (IN ITA NO.1452/B/2017)] PAGE 4 OF 4 RS.12,83,690/- LESS RS.86,185/-, THE EXTENT OF DISALLOWANCE SUSTAINED BY THE CIT(A) AT PARA 7.3 OF HIS ORDER). 3.2.4 IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE, AS DISCUSSED ABOVE AT PARAS 3.1 TO 3.2.3 OF THIS ORDER (SUPRA), WE FIND NO MERIT IN THE GROUNDS RAISED BY REVENUE IN THIS MP AND ACCORDINGLY REJECT THE SAME. 4. IN THE RESULT, REVENUES MISCELLANEOUS APPLICATION FOR ASSESSMENT YEAR 2010-11 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH JANUARY, 2019. SD/- SD/- ( LALIET KUMAR ) (JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : BANGALORE DATED : 14 TH /01/2019 /NS/* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) - II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.